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TMI Blog2010 (4) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... condone the delay in filing the cross-objection. We find that the present cross-objection has been filed by the assessee after a delay of 21 days, which is hereby condoned in the facts and circumstances of the cases and the cross-objection is taken on record. We proceed to dispose of the appeal of the revenue and the cross-objection filed by the assessee after, hearing the respective counsels. 4. The revenue has raised the under mentioned, grounds of appeal : "1. On the facts and circumstances of the case, the learned CIT(A) has erred in law in applying profit at the rate of 5 per cent as against 8 per cent applied by the Assessing Officer as reasonable in civil contractor cases. 2. On the facts and circumstance of the case, the learned CIT(A) has erred in law in deleting the addition of Rs. 4,00,000 made in capital account of Shri Ramji Dass Batra, partner and addition of Rs. 40,000 made on account of addition in capital account of Smt. Lalita Batra, partner as the assessee could not prove justification thereof during the assessment proceedings. 3. On the facts and circumstances of the case, the learned CIT(A) has erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts, one for the period 1-4-2004 to 23-1-2005 and the second from 24-1-2005 to 31-3-2005. The gross contractual receipts for the first period were Rs. 36,06,564 and for the later period were Rs. 44,42,128. The assessee had shown net profit of Rs. 15,540 and Rs. 11,060 respectively reflecting net profit rate of 0.43 per cent and 0.25 per cent respectively. The Assessing Officer was of the view that the net profit rate declared by the assessee was very low in the line of civil contractual business and in the absence of compliance by the assessee to various notices issued, the Assessing Officer noted that under the provisions of section 44AD of the Act, the rate of 8 per cent is applicable to gross receipts, and there is no requirement of maintaining books of account. The Assessing Officer applied the GP rate of 8 per cent to the gross contractual receipts after deducting the value of material supplied by the Government and sales-tax from the gross receipts. The gross contractual receipts were taken at Rs. 75,64,673 and applying rate of 8 per cent. the profit was worked out at Rs. 6,05,174. 7. The Assessing Officer also noted that there was capital introduction of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etired and Mrs. Laxmi Devi wife of Shri Ram Jee Dass Batra was admitted as partner. Therefore, from 23-1-2005, there were only two widows as partners in the partnership firm and both the ladies being illiterate were incapable of running the business and consequently the business was closed and in assessment year 2006-07, the return of income at nil was filed. The learned counsel for the assessee before CIT(A) claimed that in the circumstances both the widows were not aware of the details and books of account and hence the same could not be filed during the assessment proceedings. The assessee vide letter dated 4-11-2003 made its submission which are incorporated at pp. 4 to 9 of the appellate order. The CIT(A) called for a remand report and the Assessing Officer sent his comments vide letter 12-11-2008 which are incorporated at pp. 9 to 15 of the appellate order. The CIT(A) after considering the submissions and rejoinder of the assessee and comments of the Assessing Officer held that proper opportunity to the assessee was not given and the additional evidence produced by the assessee was admitted and the case was remanded to the Assessing Officer. The remand order of CIT(A) (sic-As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid rates of working out the income as against the books results shown by the assessee. 10. The revenue by ground No. 1 is aggrieved by the adoption of rate of 5 per cent as against the rate of 8 per cent applied by the Assessing Officer. 11. Shri S.P. Khutan appeared for the revenue and Shri S.K. Mukhi for the assessee and put forward their contentions. 12. We have heard the rival contentions and perused the records. In the entirety of facts and circumstances of the case where during the remand proceedings, the assessee had produced the books of account and the same were found to be as per the book results, shown by the assessee we find no merit in adoption of rate of 8 per cent to the book results for working out the income for the year. However, as the assessee has failed to file evidence in respect of the material purchased and certain expenses and in the absence of the assessee filing the same on record, even before the lower authorities or before us, we are in conformity with the order of CIT(A) in adopting net rate of 5 per cent to the gross receipts for working out the income of the assessee for the year under appeal. Thus, the ground No. 1 raised by the revenue is di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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